The AAOIFI Prepares to Issue an Exposure Draft Pertaining to Shariah-Compliant Crowdfunding in 2021

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has confirmed that its Governance and Ethics Board has met to review and debate on conceptual issues regarding Shariah-compliant crowdfunding. According to Omar Mustafa Ansari, the Secretary-General of AAOIFI, the Organisation is preparing to publish an exposure draft later in 2021.

Why it Matters?

Crowdfunding is gaining popularity as an alternative funding source within the industry. However, this nascent industry is also liable to a significant risk of scams and fraudulent practices, given the advent of technology and new matchmaking opportunities for businesses and investors. As such, there is a risk of reputational damage to the Islamic finance industry caused by a...